Get App
Close Ad
SENSEX NIFTY India | Accounting Policy > Computers - Software Medium & Small > Accounting Policy followed by Melstar Infotech - BSE: 532307, NSE: MELSTAR

Melstar Infotech

BSE: 532307|NSE: MELSTAR|ISIN: INE817A01019|SECTOR: Computers - Software Medium & Small
Jun 07, 16:00
, 16:01
Mar 14
Accounting Policy Year : Mar '15
a) System of Accounting:
 The Financial Statements have been prepared under the historical cost
 convention, except where impairment is made and on accrual basis in
 accordance with accounting principles generally accepted in India,
 including the Accounting Standards specified under Section 133 of the
 Companies Act, 2013, read with Rule 7 of the Companies (Accounts)
 Rules, 2014. Accounting policies have been consistently applied by the
 Company and are consistent with those used in the Previous Year.
 b) Use of estimates:
 The preparation of financial statements in accordance with the
 generally accepted accounting principles requires management to make
 judgments, estimates and assumptions that affect the application of
 accounting policies and the reported amounts of assets and liabilities,
 income and expenses. Estimates and underlying assumptions are reviewed
 on an ongoing basis. Revision to accounting estimate is recognized in
 the period in which the estimates are revised and in any future period
 c) Fixed Assets and Intangible Assets :
 Fixed Assets are valued at cost, except for certain Fixed Assets which
 have been stated at revalued amounts as determined by approved
 independent value, after reducing accumulated depreciation until the
 date of the balance sheet. Direct Costs are capitalized until the
 assets are ready to use and include financing costs relating to any
 specific borrowing attributable to the acquisition of fixed assets.
 Intangible assets are recognized, only if it is probable that the
 future economic benefits that are attributable to the assets will flow
 to the enterprise and the cost of the assets can be measured reliably.
 The intangible assets are recorded at cost and are carried at cost less
 accumulated amortization and accumulated impairment losses, if any.
 d) Investments:
 Long Term Investments are stated at cost, which include cost of
 acquisition and related expenses. Provision is made to recognize a
 decline, other than temporary, in the value of investments. Current
 investments are stated at cost or fair value whichever is lower.
 Overseas Investments are carried at their original rupee cost.
 e) Depreciation and Amortization:
 With effect from 1st April 2014, depreciation in respect of assets is
 provided on the basis of useful lives of assets as prescribed in Part
 ''C'' of Schedule II to the Companies Act, 2013.
 Prior to 1st April 2014, Depreciation in respect of assets has been
 provided for on Straight Line Method at the rates prescribed in
 Schedule XIV to the Companies Act, 1956. Depreciation on revalued fxed
 assets has been provided on Straight Line Method over the residual life
 of the asset and charged to the Profit and Loss account. Individual
 assets cost of which doesn''t exceed Rs. 5,000/- each are depreciated in
 full in the year of purchase.
 Leasehold land is written off over the lease period.
 Intangible Assets Computer Software are amortized over a period of
 five years based on the technical evaluation of their useful economic
 f) Inventories:
 Software Finished Goods (Traded) :
 Software Finished Goods (Traded) are valued at cost (arrived on FIFO
 basis) or net realizable value, whichever is lower.
 g) Foreign Currency Transactions/Translation:
 Transactions in foreign currency are recorded at the original rates of
 exchange in force at the time transactions are affected. Exchange
 differences arising on settlement of all transactions are recognized in
 the Profit and loss account.
 Monetary items denominated in foreign currency are reported using the
 exchange rates prevailing at the date of balance sheet and the
 resulting net exchange difference is recognized in the Profit and loss
 Foreign Branches:
 The translation of financial statements of Foreign Branches is done as
 under in accordance with Accounting Standard (AS) 11 (Revised) on ''The
 Effect of Changes in Foreign Exchange Rates'', considering its foreign
 branches as non-integral foreign operations:
 i.  All the items of income and expenses during the year are translated
 at an average rate.
 ii.  All the monetary and non-monetary assets and liabilities are
 translated at closing rate.
 iii.  The resulting exchange difference is accumulated in ''foreign
 currency translation reserve'' until the disposal of the net investment
 in the said non-integral foreign operations.
 h) Borrowing Costs:
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets.  A qualifying asset is one that necessarily takes a
 substantial period of time to get ready for its intended use or sale.
 All other borrowing costs are charged to revenue.
 i) Employee benefits :
 a) Post Employment Benefits and Other Long Term Benefits.
 i) Defined Contribution Scheme
 Company''s contribution for the year paid/payable to Defined
 contribution retirement benefit schemes are charged to Profit and Loss
 ii) Defined Benefit and Other Long Term Benefit Schemes
 Company''s liabilities towards Defined benefit schemes and other long
 term benefits viz. gratuity and compensated absences expected to occur
 after twelve months, are determined using the Projected Unit Credit
 Method. Actuarial valuations under the Projected Unit Credit Method are
 carried out at the balance sheet date. Actuarial gains and losses are
 recognized in the Profit and Loss account in the period of occurrence
 of such gains and losses. Past service cost is recognized immediately
 to the extent benefits are vested, otherwise it is amortized on
 straight-line basis over the remaining average period until the
 benefits become vested.
 The retirement benefit obligation recognized in the balance sheet
 represents the present value of the Defined benefit obligation as
 adjusted for unrecognized past service cost.
 b) Short-term employee benefits
 Short-term employee benefits expected to be paid in exchange for the
 services rendered by employees are recognized undiscounted during the
 period employee renders services. Such benefits include bonus/
 ex-gratia/ compensated absences.
 j) Revenue recognition:
 Revenues from software consultancy services are recognized on specified
 terms of contract in case of contract on time basis and in case of
 fixed price contract, revenue is recognized using percentage of
 completion method of accounting. Revenues from software products
 trading are recognized upon acceptance of delivery of such software
 products. Unbilled services included in other current assets represents
 amount recognized based on services performed in advance of billing in
 accordance with contract terms.
 Amount received in advance of services performed are recorded as
 unearned income.
 Revenues outside India include value added tax wherever applicable.
 Revenues in India exclude service tax charged.
 Revenue is recognized only when it is reasonably certain that the
 ultimate collection will be made.
 Dividend Income is recognized in the statement of Profit and Loss, when
 right to receive payment is established.
 Interest income is recognized on time proportion basis.
 Lease rentals are recognized on straight line basis over the lease
 k) Taxes on Income:
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the year.
 Minimum alternate tax (MAT) paid in accordance with the tax laws, which
 gives rise to future economic benefit in the form of adjustment of
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal tax after the tax
 holiday period.
 Deferred tax is recognized, subject to consideration of prudence, on
 timing differences, being the difference between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred tax assets arising
 on account of unabsorbed depreciation or carry forward losses are
 recognized only to the extent that there is virtual certainty supported
 by convincing evidence that sufficient future taxable income will be
 available against which such deferred tax assets can be realized. At
 each balance sheet date the Company reassesses unrecognized deferred
 tax assets, to the extent they become reasonably certain or virtually
 certain of realization, as the case may be.
 l) Fringe Benefit Tax:
 Fringe Benefit Tax was recognized in accordance with the relevant
 provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
 Benefit Tax issued by the Institute of Chartered Accountants of India
 m) Operating Leases:
 Assets taken on lease under which all risks and rewards of ownership
 are effectively retained by the less or are classified as operating
 lease. Lease payments under operating leases are recognized as expenses
 on accrual basis in accordance with the respective lease agreements.
 n) Impairment of assets:
 An asset is treated as impaired when the carrying cost of the asset
 exceeds its recoverable value. An impairment loss is charged to Profit
 and Loss account in the year in which an asset is identified as
 impaired. The impairment loss recognized in prior accounting periods is
 reversed if there has been a change in the estimate of the recoverable
 o) Provisions, Contingent Liabilities and Contingent Assets:
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 Notes to Accounts. Contingent Assets are neither recognized nor
 disclosed in the financial statements.
 p) Cash Flow Statement:
 Cash flows are reported using the indirect method, whereby net Profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and item of income or expenses associated with
 investing or financing cash fows. The cash fows from operating,
 investing and financing activities of the Company are segregated.
 q) Earnings per share:
 In determining earnings per share, the company considers the net Profit
 after tax after reducing the preference dividend and tax thereon and
 includes the post-tax effect of any extra-ordinary items. The number of
 shares used in computing basic earnings per share is the weighted
 average number of shares outstanding during the period. The number of
 shares used in computing diluted earnings per share comprises the
 weighted average number of shares considered for deriving basic
 earnings per share, and also the weighted average number of equity
 shares that could have been issued on the conversion of all dilutive
 potential equity shares.
 r) Cash and cash equivalents:
 Cash and cash equivalents for the purpose of Cash Flow Statement
 comprises of cash at banks, cash in hand (including cherubs in hand)
 and bank deposits with maturity of less than three months.
 Terms /Rights attached to Equity Shares
 The Company has only one class of equity shares having a par value of
 Rs. 10 per share. Each holder of equity shares is entitled to one vote
 per share.
 In the event of liquidation of the Company, the holders of equity
 shares will be entitled to receive remaining assets of the Company,
 after distribution of all preferential amounts. The distribution will
 be in proportion to the number of equity shares held by the
Source : Dion Global Solutions Limited
Quick Links for melstarinfotech
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of is prohibited.